Cryptocurrency companies are making a push towards the highly regulated U.S. derivatives market, with the main goal of meeting the demand from retail traders to make bets on digital assets.
Increased volumes in crypto derivatives
Based on data from CryptoCompare, volumes in crypto derivatives have registered to almost $3 trillion throughout the span of the previous month, which in turn accounted for more than 61% of trading in cryptocurrencies.
Source: CryptoCompare
Most of the activity here took place on offshore venues, such as those which have been overseen by Binance, that are subject to little to no regulatory oversight.
Crypto groups are seeking to build beachheads within the tightly supervised U.S. market through buying up smaller companies that already hold licenses to operate within America.
Coinbase (NASDAQ:COIN) agreed in January to buy FairX, which is a smaller Chicago futures exchange., and this occurred after Crypto.com struck a $216 million deal for two retail businesses from the U.K.’s I.G. index, CBOE bought ErisX, which is a digital asset trading business, and FTX US bought derivatives platform LedgerX.
On the Flipside
- The crypto industry has been shifting deeper within regulated markets as it takes towards building a bigger user base and challenging existing financial companies.
- This includes the brokerages which already offer trading in equities as well as other financial assets.
Why You Should Care
This tight regulation could pose a lot of restrictions for these exchanges, which might think of creative ways towards introducing their services within the U.S. market.
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